HR Block 2006 Annual Report Download - page 105

We believe the CP market to be stable. Risks to the stability of our CLOCs, to the extent available, could be used for an orderly exit from
CP market participation would be a short-term rating downgrade, the CP market, though at a higher cost to us. Additionally, we could turn
adverse changes in our financial performance, non-renewal or to other sources of liquidity, including cash, debt issuance and asset
termination of the CLOCs, adverse publicity and operational risk within sales or securitizations.
the CP market. We believe if any of these events were to occur, the
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
A summary of our obligations to make future payments as of April 30, 2006 is as follows:
(in 000s)
Less Than After
Total 1 Year 1 – 3 Years 4 – 5 Years 5 Years
Debt $ 897,426 $ 499,425 $ – $ – $ 398,001
Long-term obligation to government 183,937 107,849 74,692 1,396 –
Retirement obligation assumed 14,264 2,426 4,176 3,196 4,466
Acquisition payments 13,895 7,210 6,458 91 136
Capital lease obligation 13,209 357 860 1,043 10,949
Operating leases 856,816 269,890 371,984 157,123 57,819
Total contractual cash obligations $ 1,979,547 $ 887,157 $ 458,170 $ 162,849 $ 471,371
In October 2004, we issued $400.0 million of 5.125% Senior Notes, due file our Form 10-Q for the fiscal quarter ended January 31, 2006 by the
2014. The Senior Notes are not redeemable by the bondholders prior to SEC’s prescribed due date, we will be unable to issue any debt
maturity. The net proceeds of this transaction were used to repay the securities under this shelf registration statement until April 2007.
$250.0 million in 6
3
/
4
% Senior Notes, which were due November 1, 2004. Future payments related to acquisitions and capital lease obligations
The remaining proceeds were used for working capital, capital are included in long-term debt on our consolidated balance sheets.
expenditures, repayment of other debt and other general In connection with our acquisition of the non-attest assets of M&P in
corporate purposes. August 1999, we assumed certain retirement liabilities related to M&P’s
In April 2000, we issued $500.0 million of 8
1
/
2
% Senior Notes, due 2007. partners. We make payments in varying amounts on a monthly basis,
The Senior Notes are not redeemable prior to maturity. The net proceeds which are included in other noncurrent liabilities.
of this transaction were used to repay a portion of the short-term Operating leases, although requiring future cash payments, are not
borrowings that initially funded the acquisition of OLDE Financial included in our consolidated balance sheets.
Corporation. We plan to refinance these Senior Notes when they come due.
As of April 30, 2006, we had $850.0 million remaining under our shelf
registration for additional debt issuances. As a result of our failure to
A summary of our commitments as of April 30, 2006, which may or may not require future payments, expire as follows:
(in 000s)
Less Than After
Total 1 Year 1 - 3 Years 4 - 5 Years 5 Years
Commitments to fund mortgage loans $ 4,032,045 $ 4,032,045 $ – $ – $ –
Commitments to sell mortgage loans 3,052,688 3,052,688 – – –
Franchise Equity Lines of Credit 75,909 18,860 29,958 27,091 –
Commitment to fund M&P 75,000 75,000 – – –
Construction of new building 63,887 63,887 – – –
Pledged securities 53,026 53,026 – – –
Other commercial commitments 31,282 8,209 19,888 3,185 –
Total commercial commitments $ 7,383,837 $ 7,303,715 $ 49,846 $ 30,276 $ –
See discussion of commitments in Item 8, note 16 to our consolidated financial statements.
H&R BLOCK 2006 Form 10K
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